US equities struggled to remain unchanged or better today. In
early trading, the
(INDEXSP:.INX) traded down six points, but recovered into slightly
positive territory shortly thereafter. Trading continued
erratically throughout the rest of the afternoon and the S&P
finished down 3.6 points. Equity breadth remained at a dismal 2.5:1
negative. The small-cap
(INDEXRUSSELL:RUT) continued its underperformance and was down
0.56%. European equity indices were all lower on the day; Italy and
Spain were the worst performers, losing more than 1.5%.
) finalized its settlement with federal and state governments over
its sales of mortgage bonds from acquired subsidiaries Bear Stearns
and Washington Mutual. The New York Attorney General commented in a
news conference this afternoon that the bank would pay $2 billion
in civil penalties as part of the $13 billion deal. Additionally,
the settlement would not protect the bank nor its employees from
criminal charges. Bank stocks were the best-performing sector in
the S&P 500 now that the concerns over future regulatory
charges are alleviated.
The Office of Economic Co-Operation and Development (OECD) lowered
its global growth forecast for 2013 to 2.7% from its prior forecast
of 3.1% in May. For 2014, the growth forecast was lowered to 3.6%
from 4%. The OECD cited slowdowns in emerging-market economies,
particularly India and Brazil. In addition, the OECD also pushed
for the ECB to ease policy further and the US Federal Reserve to
keep an accommodative stance on monetary policy.
) reported earnings in the pre-market, solidly beating
expectations. The company reported EPS of $0.95 vs. $0.90
expectations and revenues of $19.47 billion vs $19.18 billion
expectations. In addition, the company raised its sales forecasts
for the coming quarter and full year. However, management noted on
the conference call that it foresees headwinds in the next quarter
and the likelihood of margin pressure.
Tomorrow's Financial Outlook
Current Federal Reserve Chairman Ben Bernanke will give a speech at
7:00p.m. EST tonight to the Economists Club in Washington. It is
possible that the speech may be a factor in tomorrow's trading.
US economic data should be a big market mover tomorrow. In the
morning, the US will release October retail sales and consumer
price indices. Consumer prices from a year ago are estimated to
rise 1% after rising 1.2% in September. Retail sales are estimated
to rise 0.1% from the prior month. Another market-moving event is
the release of the minutes from the October FOMC meeting. Because
some language over tightening financial conditions was removed from
the statement, investors will be paying more attention than usual
to the minutes.
Globally the only market-moving data comes from Japan. Japan will
release its October trade balance and September all-industry
Notable US earnings reports tomorrow include
(ADT). All are scheduled to report before the market opens.